Australia's rental vacancy rate held steady in August, with the recent lockdowns having different impacts on affected capital cities, particularly in Sydney and Melbourne.
Domain's latest report showed the national vacancy rate remained at 1.6%. The rate has been at its multi-year low for three consecutive months.
On a monthly basis, vacancy rates nudged higher in Melbourne, Brisbane, Canberra, and Darwin while remained stable in other capital cities.
Domain Research analyst Henry Yu said the recent lockdowns did not impact affected capital cities the same way.
"Lockdowns appear to have left a mixed reaction across the capital city rental markets in August, particularly evident when comparing the change in Sydney and Melbourne vacancy rates," Mr Yu said.
Tale of two cities in lockdown
Sydney's vacancy rates have remained stable at 2.6% since June despite the restrictions imposed in recent months.
Mr Yu said affordability constraints in Sydney could be keeping renters in the city to explore the housing market, keeping them in the rental market longer.
Figures from CoreLogic show Sydney’s median house price has risen by 1.8% in August to $1.03 million.
"Also, rapidly rising prices may have led to reduction in rental stock, as landlords chase capital growth on their investment properties," he said.
In contrast, the lockdown is putting upwards pressure in Melbourne's vacancy rate, which has risen for the second consecutive month in August to 3.8%.
This was preceded by a four-month downtrend in vacancy levels.
Mr Yu said this could be a perfect time for tenants to get the upper hand at the negotiating table.
"Tenants have more choice and more power to negotiate cheaper rents, as heightened rental supply in particular areas is likely to weigh down asking rents."
However, Mr Yu believes a similar scenario could happen in Sydney if lockdowns are extended for a longer period, especially if incomes start to get affected.
"While there is a rental moratorium in place, the uncertainty of extended lockdowns may result in some tenants moving in with family or friends to reduce expenditure," he said.
Rental markets still tight
Overall, conditions are still tight across most capital-city rental markets.
Perth, for instance, recorded vacancy rates at multi-year lows.
The rental markets of Brisbane, Hobart, and Adelaide also remained competitive, with vacancy rates close to their multi-year lows.
Darwin maintained its position as one of the tightest markets despite the slight rise in vacant rentals in August.
"Tenants will still be finding it highly competitive to secure a rental, but the lift in vacant rentals is a good sign that the extreme conditions may start to elevate for tenants marginally," Mr Yu said.